Reinsurance broker setting up independent cover for construction risks
Reinsurance broker Benfield is in talks with a number of construction industry trade associations about setting up employers' liability (EL) captives.
The move follows the establishment of a new EL captive for scaffolding firms by Iron Trades Insurance, Benfield and construction broker Kerry London, developed in response to rising EL premiums.
Andrew Lothian of Benfield said the Guernsey-based captive, which is still being set up, had been developed in conjunction with the National Access and Scaffolding Confederation (NASC).
Lothian said that the scaffolding industry was attractive because the risks involved were predominantly accident-related. Other construction trade associations were being consulted.
"Disease is covered, but the exposure is perceived to be nominal," he said.
Firms that were not NASC members would be eligible to apply for cover, but Lothian said all businesses would be required to demonstrate excellent claims and health and safety records.
He said the benefits for members would be considerable. "Potential future financial incentives for insured companies within the facility are substantial," Lothian said. "Depending on the surpluses within the captive, we should be able to not only deliver rate stability but also, hopefully, reductions."
Lothian declined to reveal which trade association Benfield was talking to, but said that any future captives would be limited to industries whose risks were mainly accident-related.
"Instead of these industries thinking of insurance as a tax, we're trying to change the culture to get them thinking of it as a valued customer or supplier," he said.